Toshiba brings in new CEO to oversee sale of chip unit

Toshiba has recruited ex-banker Nobuaki Kurumatani to appease those against the sale of its chip unit.

Kurumatani will assume the role of CEO to tackle those opposed to the $18 billion chip unit sale to a consortium led by Bain Capital. Hong Kong-based activist investor, Argyle Street Management, a hedge fund with $1.2 billion under management, has openly opposed the sale. Argyle Street Management argues that the sale is no longer necessary as it has other investors interested.

However Toshiba is still keen to push through the original deal. “His appointment is designed to deal with the activist shareholders because there is no one at Toshiba with the experience to tackle this,” said a financial source familiar with matter, declining to be identified as he was not authorized to speak to media.

Regarded as well-connected with politicians and bureaucrats, Kurumatani currently heads the Japanese arm of private equity firm CVC Capital Partners and before that was an executive at one of Toshiba’s main lenders, Sumitomo Mitsui Financial Group (SMFG). Current CEO Satoshi Tsunakawa, will become chief operating officer when Kurumatani steps into his role in April.

Toshiba’s financial woes are largely connected to its failed nuclear unit Westinghouse. Acquired in 2006, an ill-advised purchase in 2015 led to massive scandal and loses for its parent company. Last year Westinghouse filed for a Chapter 11 bankruptcy and Toshiba was left scrambling to recoup funds.

Toshiba bosses also finally penned an $18 billion deal for its chip unit in September, paving the way for a consortium led by Bain Capital and Apple to take over its memory unit. That sale was then met with opposition from Toshiba partner Western Digital, however an out of court settlement was reached between the two firms paving the way for the sale to go ahead.